CEO’S MESSAGE TO MEMBERS Overview It is my privilege to report that the PPS Group again experienced a very positive year in 2022, supporting our members and returning value to them. PPS continued to support its members and return value to them. Our unique mutual model ensures that all the premiums that our members pay into our insurance businesses are ultimately returned to them – with investment growth – either through claims paid or through allocations to their PPS Profit-Share Accounts™ when they hold qualifying life-risk products. Members who hold additional products with one or more of our subsidiaries and/or affiliates, benefit even further through the PPS Profit-Share Cross-Holdings Booster. The only element that is not returned is the cost of running the business, for which our Board has strict metrics in place. Members who hold additional products with one or more of our subsidiaries and/or affiliates, benefit even further through the PPS Profit-Share Cross-Holdings Booster. As the effect of the COVID-19 pandemic started to ebb in 2022, our life insurance business returned to profitability. Members will remember that our strategy in 2021 was to support our members to the maximum extent possible through altered claims protocols, resulting in zero life underwriting profit in that year. Especially COVID-19 death claims almost disappeared in 2022, for which we are grateful. We still experienced significant levels of sickness claims, and it was only towards the latter part of 2022 that COVID-19 sickness claims began to reduce meaningfully. On the short-term insurance side, claims ratios also started to return to pre-pandemic levels as vehicles returned to the roads. The severe flooding in KwaZulu-Natal in April 2022 caused an increase in short-term insurance claims, with the homes and businesses of many of our members in that region affected. From an investment perspective, the markets were volatile throughout the year. This can be ascribed to inflation rising sharply worldwide and the economic impact of the war in Ukraine. These two effects are, of course, strongly correlated due to global supply chain specifics and energy market impacts. At home, this was exacerbated by South Africa’s precarious power supply position, especially during the second half of the year when the number of hours lost to loadshedding was at its highest ever. As we shape our strategic agenda towards 2027, we shall challenge ourselves continuously on living our purpose, protecting the lives and livelihoods of our professional members and assisting them to live the lives they aspire to.” Izak Smit Group Chief Executive Officer “ 22 Leadership commentary
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